RBS report will be subject to independent legal scrutiny

The City watchdog has bowed to pressure from MPS for independent legal scrutiny of a controversial report into mistreatment of small businesses at Royal Bank of Scotland.

Financial Conduct Authority (FCA) chief executive Andrew Bailey has agreed to a proposal from the Treasury select committee to appoint a legal adviser to compare the regulator’s soon-to-be published summary with the underlying report into the scandal at RBS’ controversial restructuring unit.

The move comes after the committee last week wrote to Mr Bailey threatening to use its “formal powers” to demand publication of the leaked report if its request was denied or if it was not happy with the findings.

Mr Bailey agreed to give the summary and full report to the legal adviser – set to be Andrew Green QC – to assess whether it is a “fair and balanced summary”.

But he stressed in a letter to Ms Morgan that this would be “an exceptional case and does not establish a precedent”. Following a review by the committee’s adviser and the FCA’S own legal adviser, the regulator will publish a final account.